So, as November 1st arrives, we were supposed to get a good feel if the rollout of the Affordable Care Act was going as planned, trajectory of insurance purchasers, relative cost comparions, etc.
We really have none of the above.
The website debacle has basically brought the entire process to a standstill. People either were unable to purchase insurance, or were so turned off that they didn’t bother.
So what we don’t know, and the data lacking therein, far outnumbers the things that we demonstrably do know.
So, to get past the political spin, what data is there? What, if any, conclusions (partial or otherwise) can we make? What do we know, for certain?
1. The Website has issues; major issues.
The website problem is not a simple fix. Testimony this week on Capitol Hill clearly demonstrated that. The officials from the Department of Health and Human Services, as well as contractors paid to build the web platform, didn’t agree on much, but they did agree on that.
A repeated promise was made in hearings however: that the website would be operational by November 30th. That is a dubious promise. If the problems that exist in the website are as reported, it is not simply fixing a few lines of code that will make everything all right. There are major isuses, not only with the code but the basic structure of the system, the transfer of data from the web platform to-and-from major databases, and communication with the insurers themselves.
It will take a Herculean effort to truly make the system operational by the end of November.
Furthermore, the tech surge that President Obama largely seems to be rhetoric, as the majority of those chosen to run the new effort are long term Beltway insiders. If anything should give you pause, that should.
2. Medicaid enrollees are far outnumbering purchasers of insurers.
This may be the most worrisome part of what has happened over the last month, even more than the website issues. Fundamentally, the entire premise of the ACA rests on the balance of having new people buy insurance on the markets, to partially ‘subsidize’ those millions being added to the Medicaid rolls.
As a Washington Post article today noted, on many of these exchanges, Medicaid enrolles are ounumbering purchasers 9:1. That is a death knell for the system if it continues. As the CBO reported from the beginning, we need closer to a 1:1 ratio (the CBO says the ratio of Medicaid enrollees:insurance purchasers should be approximately 9.1:7.9, to be precise) to maintain fiscal sustainability.
However, we simply don’t know if this is a short term blip or a long term trend. This could all be a result of the poor website functionality, which then had a ripple effect in the marketplace. Or it could honestly be that purchasers don’t like what they see, and may choose option B, the Obamacare tax penalty…which would be fiscally disastrous for the system. That would be the leading edge toward the ‘death spiral’ that the Administration and insurance industry fears so much.
3. The Administration has come catch up to do to make their enrollment targets for 2014.
To maintain the system, they need a minimal number of paying customers in the Exchanges, as described above. The number the CBO has stated is approximately 7 million by the target date (which, after the White House pushed it back, is now the end of March).
They had expected to sign up about 500,000 people by the end of October. That number will be missed by a large margin. Secretary of HHS Kathleen Sebelius refused to release the numbers, but most estimates state that the number of policies actually sold will be far less than 100,000
That number is not going to significantly improve in the month of November, because the website is still largely nonfuctional. Then comes the busy month of December, with the intrusion of the holidays.
My guess (and it is only a guess) is that they may not meet their goal for October 31 of 500k purchasers even as of January 1, 2014.
If that holds true, or even if they do better than expected and get up to 1 million person mark, that means that they will have to sign up 6 million persons in three months time. That is a huge hill to climb.
4. Liberals blaming Republicans for this mess don’t really have many facts backing up the claim.
Liberals to this day are blaming the ‘intransigence of Republicans’ for the failures in the system. However, this has been simply disproven: go to a number of states that have Democrat Governors and legislatures, that have been implementing Obamacare from the beginning, and see if they are doing better.
For the most part, they are not. Take Oregon, who as of earlier this week, had not had any purchasers of insurance through their exchanges, though they have had tens of thousands of enrollees in Medicaid. California, New York and others are not much better.
This is largely not a political problem at this point, but a problem of managerial competence or lack thereof.
5. We have anecdotal evidence of people paying more for insurance after losing their insurance.
This is ONLY anecdotal evidence at this point; and that makes it very hard to really analyze.
Definitely millions of people are losing their current insurance because of the ACA and associated retgulations that are term limiting those insurance plans. Democrats can blame the insurers, but that is a lie: the full responsibilty of that process lies with the ACA. The vast majority of these plans would still exist today if not for the ACA; it is as simple as that.
As for increased health care premiums, we won’t know for a long time if that is a systemic problem, or an isolated one. Democrats claim those cases are the exception, Republicans claim they are the rule. The truth is neither side has enough data to make such absolute claims. And that data will take a long time in coming. It may take months, but more likely years to know if the ACA is bending the cost curve up, down, or has no effect. I have my suspicions, but there are only that: suspicions.
6. Conservatives should not rejoice; the plan can still be saved.
I know, this is a shocking statement coming from me, considering I have been so pessimistic about the system as a whole. But the truth is, if there were competent managers in charge of this, this rollout could have gone much better.
The website debacle has a snowball effect, to be sure. We don’t know how many people, but certainly hundreds of thousands of people if not more would have gone on to the exchanges and, most likely with the help of subsidies, purchased insurance if they were allowed to.
Incompetence prevented that.
Where the rubber meets the road is getting people who will not receive a significant subsidy to purchase on the exchanges. Now, this is really the hard part for Democrats. So far, from what little I have seen, the insurance plans on the exchanges are more expensive and provide less financial coverage than many plans that were available prior to the ACA.
Democrats will counter that these plans provide ‘more’ coverage. There is some truth to that, but much of that coverage is not really beneficial to the majority of consumers. Furthermore, remember that the primary demographic that they must convince to open their pocketbooks and purchase insurance, instead of paying the penalty, is the young, healthy American. How many of these people are thinking about ‘better’ coverage when they don’t use the coverage they have today? Are they going to be willing to pay $100-$200 more a month for something they don’t use?
We simply don’t know the answer to that.
Overall, it has clearly been a rough month for supporters of Obamacare, as nothing seemingly has gone right in their rollout. Can the system be saved? Yes, but it will take not only a Herculean task on the IT side, but a lot of selling by President Obama and the White House, along with a lot of luck, to convince people to do what is not in their short term interest (i.e. purchasing more expensive health insurance) while promising dubious long term benefits.